Cannery Row Marketplace Developers Default on Prime Property, Headed to Foreclosure.

At 10am on July 12, First American Title Insurance Co. plans to hold an auction at the county administrative building on West Alisal Street. On the list of properties in foreclosure that will go on the rolls: A vacant swath of Cannery Row with prime ocean views.

Cannery Row Marketplace, renamed Ocean View Plaza after the Monterey City Council denied the first version of the development, was approved in 2004. Since then, the bayside portion of the lot has become a weed patch fronted by a chainlink fence; the inland side is a parking lot.

That’s far from what Palo Alto-based developer Cannery Row Marketplace LLC envisioned there: 51 condos (13 of them affordable), 377 parking spaces, a community park and more than 100,000 square feet of retail space.

Now, the developers owe more than $328,000 in back taxes. A foreclosure notice listing $1.7 million in arrears on a loan was first published in the Weekly June 20. A separate notice in the Herald, placedby Medallion Silver LLC, lists another $8.6 million debt on what appears to be a separate loan on the same property. (The original price was $4.6 million.) Medallion has scheduled an auction July 9 at the Castroville Library.

The marketplace project was the subject of dozens of news articles in the ’90s as it faced opposition from stakeholders. The Save Our Waterfront Committee, formed by Monterey resident Barbara Bass Evans, sued, as did the Open Monterey Project. (Both won procedural challenges.) The developer is still waiting for its 2009 lawsuit against the California Coastal Commission, which imposed some public-access requirements, to be resolved.

Bass Evans, who died last year, held a “funeral” for the property’s old San Xavier Cannery warehouse before it was demolished. As a compromise in the proposal’s second iteration, developers offered to instead spare the deteriorating Stohan reduction plant across the street.

Former Cannery Row Foundation President and historian Neal Hotelling doesn’t mind development, so long as it honors the history of Cannery Row’s heyday. “I don’t have an objection to construction, as long as it’s done correctly,” he says. But when it came to including local historians, he adds, the developer failed.

Phil Taylor of Cannery Row Marketplace did not return calls, and his partners could not be reached. Attorney Jeff Gilles, whose firm represents the developer, thinks the project is still on track. So does Monterey architect Allen Robinson, who designed the project. “The past six or seven years have been tough for anybody in the business,” he says. “Generally, the cost of construction is higher than the project values.”

Foreclosure proceedings, he adds, don’t necessarily mean the property will go into foreclosure. But if it does, some developers are already eying the site. Former Monterey City Councilman Carl Ouzten, who’s working on a mixed-use development on Lighthouse Avenue, says, “I want to find out if I can get some people together and buy it.”

Cannery Row Company partner Ted Balestreri says, “I wish at times we had a chance at it. Maybe one of these days we’ll see an opportunity.”

That opportunity will likely be limited, without the entitlements granted to the developer.

Cannery Row Marketplace planned its own desalination plant. To comply with county rules requiring a public partner in a desal project, Monterey City Council doubles as the Ocean View Community Services District. That body has met quarterly since 2005, most recently in March.

According to the minutes: “There is nothing to report at this time.”